PACRA Maintains Stability Rating of MCB Pakistan Sovereign Fund
|Rating Type||Stability Rating|
The rating reflects strong strength of the fund's liquidity and credit risk profile and a moderate strength of the interest rate risk profile. The Investment process adapt a preemptive risk management framework to dilute risk levels and volatility during the portfolio construction process. The fund has a mandate to invests a considerable portion in short tenor government papers which amplifies the fund's liquidity and credit risk profile. As per the investment policy, weighted average time to maturity of the Net Assets shall not exceed four years and this restriction shall not apply to securities issued by the Federal Government and there is no restriction regarding time to maturity of any single asset in the portfolio and duration of a single security in the portfolio. At end-Dec'20, ~31% of fund's assets were invested in PIBs and ~36% of the assets were allocated towards T-Bills. Remaining assets of ~32% were placed with bank rated 'AAA'. The unit holding pattern of the fund is moderately concentrated with top ten investors representing ~47% of the fund's assets, which exposes the fund to low level of redemption pressure.
Going forward, the fund intends to maintain its asset allocation in government securities, however the allocations may be changed based on market circumstances. Material changes in the fund's asset allocation strategy, impacting its credit quality and/or exposure to interest rate risk, would affect the rating.
MCB-Arif Habib Limited Savings and Investments Limited (MCB-AH or the "Company") is a public listed company, regulated by the SECP. MCB-AH holds licenses for Asset Management, Investment Advisory and Pension Fund Management. MCB-AH was incorporated in 2000 as Arif Habib Investments Limited and subsequently merged with MCB Asset Management Company in 2011, with the objective of achieving synergies in asset management business and access to a wider distribution network. Pursuant to the merger, name of the Company was changed to MCB-Arif Habib Savings and Investments Limited. MCB-AH caters to both conventional and Shariah compliant clientele and is currently managing a diverse product slate of fifteen open end funds and two voluntary pension schemes. MCB-AH is also managing one the largest AUMs under SMA segment and holds significant position in the investment advisory domain.
The major shareholders of MCB-AH are MCB Bank Limited ~51%, Arif Habib Corporation Limited ~30% and Adamjee Insurance Company Limited ~8%. The general public holds remaining ~11% of the shares. MCB-AH's control vests in eight member board of directors, including the CEO. There are four non-executive directors, while three directors are independent. The AUMs (CIS & VPS) of MCB-AH increased to ~PKR 82,721mln at end Dec'20 (Jun'20: ~PKR 66,210mln).